A handful of out-of-state oil and gas companies paid $11 million to the federal government as a lease payment to allow them to frack for natural gas in the Wayne National Forest, the only national forest in Ohio.
Drillers from Oklahoma, Pennsylvania and Texas all won bids for some of the 41 plots that were sold Tuesday, the culmination of about a decade of work from three presidents to expand oil and gas exploration in the forest and litigation from environmentalists trying to block it.
The sale spans nearly 2,800 acres of forestland. Both the signing bonuses and royalty payments will be split between the federal government and the state.
As the U.S. Bureau of Land Management said Wednesday announcing the sales of leases all over the country, legislation championed by President Donald Trump lowered the legal minimum of those royalty payments from 16.67% to 12.5%. That makes the leases that much more favorable to the industry than the public, the ostensible landowner.
“[This] reduces the cost of doing business on public lands, making oil and gas development more economically attractive to industry,” the agency said in a statement. “This is expected to spur additional leasing and drilling activity, which in turn supports increased domestic energy production and strengthens U.S. energy security.”
Finalizing leasing in the Wayne has been part of the Trump administration’s aggressive pursuit of opening new public lands to the oil and gas industry while easing some of the rules around bond requirements, public comments and timelines around the lease sales.
Thousands protested the lease sale
Environmentalists typically oppose lease sales of public lands to oil and gas companies for two reasons. For one, the drilling and extraction itself can harm plants and wildlife in the protected areas – the Center for Biological Diversity raised this issue for years in court to stall the lease sale. They also say they make governments financially dependent on fossil fuels, complicating the transition to a renewable-energy-dependent grid.
More than 3,650 people filed letters of protest with the federal government over the sale.
Wendy Park, an attorney with the Center for Biological Diversity, said in an interview that while further legal action remains on the table, it would be a steep ask for a judge to intervene in some way so late in the process. She said it’s “outrageous” that the federal government would allow a few corporations to prosper at the expense of Ohio’s air, water and local endangered species in the forest.
“Thousands of Ohioans spoke out,” she said. “Unfortunately, the federal government blew them off.”
Drilling for oil and natural gas in Wayne goes back to the mid-20th century. However, the new leases call for “unconventional” drilling, more commonly referred to as fracking. This entails operators drilling thousands of feet downward – much deeper than “conventional” wells – before turning 90 degrees and reaching laterally. Then a mixture of water, sand and chemicals is injected at high pressure to force the gas out at the surface. Operators are left to dispose of the millions of gallons of liquid waste.
While the lease sales are final, the companies still must obtain permits from the U.S. BLM before they can begin drilling.
Wayne is unique in that it’s not one contiguous plot of land but more like three separate swaths around southeast Ohio. The leases for sale sit near Marietta, Ohio, and Parkersburg, West Virginia.
The federal action mirrors that of the state government. Republicans at the General Assembly and governor’s office over the past few years built a legal apparatus allowing the state to lease out 22,000 acres of its state parks and wildlife reserves to out-of-state oil and gas companies.
The new leasees are Gulfport Appalachia, of Oklahoma, Apex Energy, of Pennsylvania, Magnum Producing, of Texas, Texas Independent Exploration, and OhioGasCo, of Pennsylvania.